Trimble Inc (TRMB)

Trimble Inc's liquidity ratios show a mixed performance over the years. The current ratio has displayed fluctuations, ranging from a low of 0.98 in 2020 to a high of 1.27 in 2024. This ratio indicates the company's ability to cover its short-term obligations with its current assets. In general, the current ratio has been above 1, suggesting that Trimble has generally been able to meet its short-term liabilities.

On the other hand, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, shows a similar trend but at lower levels. The quick ratio ranges from 0.13 in 2023 to 0.41 in 2024. This indicates that the company may have had some challenges in meeting its short-term obligations without relying on inventory. However, the quick ratio has generally been below 1, signaling a potential liquidity risk.

Lastly, the cash ratio, which is the most conservative liquidity measure as it considers only cash and cash equivalents, has also displayed fluctuations similar to the quick ratio. The cash ratio varies between 0.13 in 2023 to 0.41 in 2024, indicating that Trimble has had varying levels of cash to cover its immediate liabilities.

Overall, while the current ratio suggests that Trimble has generally been able to meet its short-term obligations with its current assets, the quick ratio and cash ratio paint a slightly different picture, indicating potential liquidity challenges without considering inventory. Trimble should continue monitoring and managing its liquidity position to ensure it can meet its short-term financial commitments effectively.

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Additional liquidity measure

The cash conversion cycle for Trimble Inc has shown fluctuations over the years. As of December 31, 2020, the company's cash conversion cycle stood at 79.06 days, indicating the time it takes for Trimble to convert its investments in inventory and other resources into cash flows from sales.

By December 31, 2021, this number increased to 81.63 days, suggesting a slightly longer cycle in the following year. In December 31, 2022, the cash conversion cycle further extended to 93.53 days, possibly due to changes in Trimble's operations or industry conditions.

However, by December 31, 2023, the cash conversion cycle declined significantly to 54.81 days, indicating a more efficient cycle and faster conversion of investments into cash. The trend continued in December 31, 2024, with a further decrease to 59.59 days, reflecting improved efficiency in managing inventory, receivables, and payables within the business.

Overall, fluctuations in Trimble's cash conversion cycle suggest varying levels of efficiency in managing working capital and generating cash flows from operations over the reviewed years. Monitoring and analyzing this metric helps assess the company's effectiveness in managing liquidity and operational performance.